Starting from 1 September 2025, a new Failure to Prevent Fraud Offence will be enforced for large, incorporated charities that meet at least two of the following criteria:

• More than 250 employees
• £36 million in income
• £18 million in total assets.

The offence forms part of the Economic Crime and Corporate Transparency Act 2023.

Charities of this size must ensure they have appropriate systems and controls in place to prevent fraud within their operations. Failure to do so could result in significant legal consequences, including potential criminal charges

It is essential for trustees and senior managers to understand their responsibilities and take proactive steps to implement fraud prevention strategies. This includes developing comprehensive policies, providing staff training, and regularly reviewing financial controls . Failure to implement these measures could expose the charity to substantial legal risks.

The aim of this new offence is to strengthen governance and encourage organisations to take fraud prevention seriously. For charities affected, the time to act is now to ensure they are prepared for the new legal obligations that come into force in 2025.

Fraudulent letters

Additionally, The Charity Commission for England and Wales has alerted charities about fraudulent letters being sent under its name. These letters falsely claim to be from the Commission and request sensitive financial and governance information. The regulator has confirmed that it does not send unsolicited letters asking for such details and is urging charities to be extra cautious.

This scam underscores the increasing risk of fraud within the sector, as cybercriminals attempt to exploit charities’ trust in official communications. The Commission advises all charities to verify the authenticity of any unexpected correspondence before responding. If a charity receives a suspicious letter, it should contact the Charity Commission directly using official contact details and report any concerns to Action Fraud.

To protect against fraud, charities should implement strong internal controls, educate staff and trustees on identifying scams, and ensure all official communications are handled securely. By remaining vigilant, charities can help safeguard their funds and sensitive information from fraudulent activity.